The US government has enabled a larger number of troubled home loan borrowers to take advantage of a refinancing program offered by mortgage companies, Freddie Mac and Fannie Mae.

The Federal Housing Finance Agency announced on Wednesday that under the Home Affordable Refinance Program, Freddie Mac and Fannie Mae will be allowed to refinance home loans to borrowers whose houses are now worth a great deal less – upto 25% down - that their current mortgage. Before this announcement, the refinance plan was authorized to bail out only those borrowers whose homes had fallen slightly, up to 5%, below their current mortgage.

The Obama administration decision to use government-controlled lenders, Freddie Mac and Fannie Mae to bring a larger number of troubled borrowers under its refinance scheme will bring relief to thousands of homeowners whose houses have fallen hugely in value as compared to what they paid for them during the housing industry boom. According to Standard & Poor’s/Case-Schiller home price index, housing prices across the nation have slumped by 33% since 2006.

US Treasury Secretary Tim Geithner commented on the expansion of refinance program saying that it would not only provide relief to troubled borrowers but also go a significant way in getting the economy back on track.